Billionaire investor Ken Griffin’s Citadel Advisors recently made significant portfolio adjustments, shedding a large stake in Broadcom while initiating a new, albeit small, position in Palantir Technologies. These moves, coupled with his earlier strategic pivot from Palantir to high-flying biotech Summit Therapeutics, offer a fascinating glimpse into how top-tier money managers navigate the volatile waters of high-growth sectors like AI and biotech. For long-term investors, understanding these shifts reveals a calculated blend of risk, opportunity, and valuation assessment at the highest levels of Wall Street.
For decades, retail investors have keenly observed the moves of financial titans, hoping to glean insights from their colossal trades. Thanks to mandatory quarterly 13F filings with the Securities and Exchange Commission, we get a unique window into what Wall Street’s most successful minds, like Ken Griffin, are buying and selling. Griffin, who helms Citadel Advisors—recognized by LCH Investments as the best-performing hedge fund in history by cumulative net gains—offers a particularly compelling case study.
His recent activity, particularly a significant divestment from Broadcom and a new, cautious entry into Palantir Technologies, reveals a dynamic approach to the market. This isn’t Griffin’s first high-profile pivot; just months earlier, he significantly reduced his stake in Palantir to make a bold bet on the high-potential, high-risk biotech firm Summit Therapeutics. Let’s dissect these strategic shifts and what they might signify for the discerning investor.
Griffin’s Latest Play: Selling Broadcom and Re-engaging with Palantir
In the second quarter, Citadel Advisors made a striking move, selling a staggering 99% of its Broadcom stock. This decision is noteworthy given Broadcom’s standing as the world’s second-largest semiconductor company and a key player in the artificial intelligence (AI) infrastructure market. Over the past five years, Broadcom stock has delivered an impressive total return of approximately 690% as of late April, according to analysis by The Motley Fool.
Broadcom’s strengths are undeniable:
- It’s a market leader in Ethernet networking chips for AI workloads, a sector projected to grow at 34% annually through 2029.
- It holds a strong position in custom AI accelerators (ASICs), building chips for major tech giants like Alphabet’s Google, Meta Platforms, ByteDance, and OpenAI. The AI accelerator market itself is forecast for 29% annual growth through 2030.
- Its subsidiary VMware, acquired for $69 billion, is recognized by Forrester Research as a leader in distributed hybrid cloud infrastructure, indicating significant strategic value and organic growth potential in its software segment, which saw sales increase by 47% after the acquisition.
Despite these robust fundamentals and a Wall Street consensus anticipating 36% annual adjusted earnings growth through fiscal year 2026, Griffin’s nearly complete exit suggests a re-evaluation. While Broadcom’s forward price-to-earnings (P/E) ratio of approximately 28x might seem reasonable compared to the S&P 500, its valuation climbs to 55 times adjusted earnings when looking at recent performance, leading to questions about whether its AI narrative is more “hype than substance” for a fund of Citadel’s magnitude.
A Small Re-entry into Palantir
Concurrently with the Broadcom sale, Griffin initiated a small position in Palantir Technologies. This move is particularly intriguing given Palantir’s volatile performance. Shares of the AI data-mining specialist have rocketed an astonishing 2,700% since January 2023, according to The Motley Fool. Palantir develops sophisticated analytics software for government and commercial clients, leveraging its unique ontology-based architecture to integrate data and machine learning (ML) models into actionable decision-making frameworks.
This software capability, ranked by Forrester Research as a technology leader in AI/ML platforms, has driven unrelenting demand, with its customer count doubling in the last two years and revenue growth accelerating for eight consecutive quarters. However, Palantir’s valuation remains a major point of contention. The stock currently trades at an “absurd” 340 times adjusted earnings, with a median analyst target price of $165 per share implying an 8% downside from its current $180 price point, as reported by The Motley Fool. Griffin’s decision to buy, even if opportunistic during a dip (the stock was down 40% in early April, trading under $75), highlights the high-risk, high-reward nature of betting on such high-growth, high-valuation AI plays.
Flashback: Griffin’s Previous Palantir Exit and High-Stakes Biotech Bet
Griffin’s recent Palantir entry marks a shift from his prior stance. In the third quarter, Citadel significantly reduced its exposure to Palantir, selling about 5.2 million shares, or 91% of its holdings, despite the stock’s eye-popping 945% gains from the end of 2022 through November 2024. This initial exit signaled a potential belief that the AI giant’s bull run might not be sustainable at that time.
Instead, Citadel pivoted, starting a new position in Summit Therapeutics. Shares of this clinical-stage cancer drug developer surged over 600% in 2024, attracting strong bullish sentiment from Wall Street analysts, with some forecasting a further 139% gain from its November 29 closing price, as highlighted by H.C. Wainwright analyst Mitchell Kapoor’s $44 price target.
Summit Therapeutics is developing ivonescimab for lung cancer treatment outside of China. The Chinese company Akeso, which owns ivonescimab, has already secured local regulatory approval. The drug garnered significant attention in September when Akeso unveiled surprising results from a head-to-head trial against Keytruda, the market leader. Newly diagnosed lung cancer patients receiving ivonescimab were 49% less likely to worsen than those on Keytruda, a drug that generated $25 billion in sales in 2023.
Ivonescimab’s mechanism of action—inhibiting both PD-1 and VEGF pathways—is a unique “double-sided” approach, combining two established cancer treatment strategies (PD-1 inhibitors like Keytruda and VEGF inhibitors like Avastin) into a single protein. This could make oncologists more comfortable prescribing it if it receives FDA approval, as combining these therapies is already common practice.
The road ahead for Summit, however, is long and risky. The successful Chinese trial needs validation in North America. Summit is currently running two Phase 3 trials in the U.S.:
- Harmoni trial: For second-line lung cancer patients, with top-line data expected in mid-2025.
- Harmoni-3 trial: For newly diagnosed lung cancer patients (first-line), with top-line results not expected until 2027. This is the more crucial study for long-term revenue.
Despite its potential, Summit carries an enormous valuation of $13.6 billion at the end of November, with no products on the market yet. While Griffin’s ultra-high risk tolerance might justify such a bet, for most investors, the significant “success already baked into this stock’s price” makes it an exceptionally risky proposition.
The Contrasting Stability: Chevron as a Billionaire Consensus Pick
Interestingly, while Griffin has been active in high-growth, high-volatility sectors, he also aligns with other prominent billionaires—Warren Buffett, Ken Fisher, and Steven Cohen—on a more traditional, stable investment: energy titan Chevron. According to 13F filings aggregated by WhaleWisdom.com, all four investors significantly added to their Chevron positions in the December-ended quarter, highlighting a common thread despite their differing investment philosophies.
Their collective optimism in Chevron stems from several factors:
- Sustained High Crude Oil Prices: Expectation of elevated crude oil prices due to tight global supply and geopolitical factors, which directly benefits Chevron’s upstream (drilling) operations.
- Production Growth: Chevron achieved an all-time high of 3.1 million barrels of oil-equivalent production per day in 2023, with anticipated growth of 4% to 7% this year. The acquisition of Hess for $53 billion, expected to close in 2024, will further boost its production profile in Guyana and the Bakken shale.
- Integrated Operations: Its balanced portfolio of upstream, midstream (pipelines with fixed-fee contracts), and downstream (refineries and chemical plants) assets provides resilient cash flow in various economic climates, hedging against oil price volatility.
- Strong Financials: A net debt ratio of just 7.3% at the end of 2023, superior to many global energy majors, grants exceptional financial flexibility.
- Robust Capital Return Program: Chevron authorized a $75 billion share repurchase program and increased its quarterly dividend by 8%, marking its 37th consecutive year of dividend increases. Its 4.1% dividend yield is nearly triple that of the S&P 500.
- Attractive Valuation: Trading at 11.7 times Wall Street’s consensus earnings forecast for 2025, it represents a 19% discount to its five-year average forward-year earnings multiple.
Chevron represents a fundamentally strong, income-generating investment, a stark contrast to the speculative high-growth plays, showing that even the most aggressive hedge fund managers value stability and robust financials in parts of their portfolio.
The OnlyTrustedInfo.com Perspective: Navigating Billionaire Insights
Ken Griffin’s dynamic portfolio shifts, from shedding a high-flying semiconductor giant like Broadcom to making calculated, albeit small, entries into high-valuation AI plays like Palantir, and earlier, a high-risk biotech bet on Summit Therapeutics, offer invaluable lessons for the discerning investor. These moves underscore the constant re-evaluation of market narratives, especially in rapidly evolving sectors like AI and biotech where growth potential often clashes with exorbitant valuations.
While tracking “smart money” provides inspiration, it’s crucial to remember that billionaire investors operate with capital and risk tolerance levels far beyond the average individual. Their decisions are often part of complex hedging strategies or opportunistic plays on short-term dips that align with their specific fund mandates. For members of the onlytrustedinfo.com community, the key takeaway is not merely to mimic these trades, but to understand the underlying rationale:
- Valuation Matters: Even for high-growth stocks, extreme valuations eventually become a limiting factor.
- Risk Assessment is Paramount: Biotech, in particular, carries inherent clinical trial risks that can lead to heavy losses.
- Diversification is Key: Billionaires often balance high-beta growth plays with stable, fundamentally strong companies like Chevron.
- Long-Term Vision: While short-term trades grab headlines, sustained wealth is built on thorough due diligence and a long-term investment horizon tailored to one’s personal financial goals and risk profile.
By dissecting these high-profile movements, we gain a deeper appreciation for the nuanced strategies employed at the apex of the financial world, helping us refine our own approaches to building lasting investment success.
